[Congressional Record Volume 149, Number 139 (Friday, October 3, 2003)]
[Senate]
[Pages S12461-S12462]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORZINE:
  S. 1714. A bill to amend the National Housing Act to increase the 
maximum mortgage amount limit for FHA-insured mortgages for multifamily 
housing located in high-cost areas; to the Committee on Banking, 
Housing, and Urban Affairs.
  Mr. CORZINE. Mr. President, today I am introducing legislation, the 
FHA Multifamily Housing Loan Limit Adjustment Act of 2003, that will 
improve access to affordable housing for families living in high cost 
areas where there is a shortage of such housing. This bill was 
introduced earlier this year by Congressmen Gary Miller (R-CA) and 
Barney Frank (D-MA) and was recently approved by the House Financial 
Services Committee.
  The Multifamily Housing Loan Limit Adjustment Act of 2003 is 
supported by housing and community advocates and has also been endorsed 
by the National Association of Home Builders, the National Association 
of Realtors, the Mortgage Bankers Association, the Manufactured Housing 
Institute, and the National Affordable Housing Management Association.
  The Federal Housing Administration's Multifamily Housing programs are 
among HUD's most successful. The Federal Government has tried a number 
of different approaches to providing housing over the last 50 years. 
The most successful of these rely heavily on a public/private 
partnership that encourages the private sector to produce housing with 
support from the Federal Government. The FHA mortgage insurance 
programs have been extremely successful in producing new and 
rehabilitated housing with little or no cost to the Federal Government.
  As you know, rising construction costs have resulted in a shortage of 
moderately priced affordable rental units. Rent increases now exceed 
inflation in all regions of the country, and new affordable rental 
units have become increasingly harder to find. Because of the current 
dollar limits on loans, FHA insurance cannot be used to help finance 
construction in high-cost urban areas such as the New York/New Jersey 
metropolitan area, Philadelphia and San Francisco.
  HUD statistics demonstrate this--in 2002 and 2003, no multifamily 
loans have been FHA insured in New York City, Philadelphia, Los 
Angeles, Seattle, Massachusetts, or New Jersey.
  Increasing the limits on loans for rental housing would create more 
incentives for public/private investment in communities through America 
and spur the new production of cooperative housing projects, rental 
housing for the elderly and new construction or substantial 
rehabilitation of apartments by for- and non-profit entities.
  The National Association of Home Builders estimates that increasing 
the limits in high cost areas will allow for an additional 6,000 units 
of rental housing to be built each year in the cities limited by the 
current law. These 6,000 units will generate $318 million in new income 
to the residents and businesses in these cities, $38 million in added 
revenues to the local governments, and 6,720 new jobs. Over a ten year 
period, the cumulative effects of the additional building will 
contribute $9 billion in new income to the cities where the limits 
currently constrain new rental production.

  While Congress approved legislation I introduced in 2001 to increase 
the statutory limits for FHA-insured multifamily project loans to 
account for inflation, we failed to act on a key provision in my bill 
to raise the loan limits for high cost areas. I am reintroducing that 
portion of my bill gain, with the hope that two years later, we can 
finally achieve the increases we need to make the FHA multifamily 
programs succeed in all our communities, particularly in those high 
costs areas that so desperately need additional affordable rental 
housing.
  There is currently no HUD program designed to provide rental housing 
for working families from 60 percent to 100 percent of median income 
who are unable to find decent, affordable housing near where they work. 
Yet, the most recent Census data reveals that these working families, 
including vital municipal workers like teachers and police officers, 
are increasingly vulnerable and the lack of decent, affordable housing 
is increasingly being seen as a significant impediment to local 
economic growth. This is one reason why the FHA multifamily programs 
are so important.
  Without this much-needed adjustment to the FHA multifamily loan 
limits, access to affordable housing for our working-citizens will 
continue to lag, thousands of more families will join the 14 million 
people who currently face severe housing needs and our nation's economy 
will suffer.
  I hope my Senate colleagues will support the legislation and help 
ensure that America's working families have access to affordable 
housing.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1714

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``FHA Multifamily Loan Limit 
     Adjustment Act of 2003''.

     SEC. 2. MAXIMUM MORTGAGE AMOUNT LIMIT FOR MULTIFAMILY HOUSING 
                   IN HIGH-COST AREAS.

       Sections 207(c)(3)(B), 213(b)(2)(B)(i), 
     220(d)(3)(B)(iii)(II), 221(d)(3)(ii)(II), 221(d)(4)(ii)(II), 
     231(c)(2)(B), and 234(e)(3)(B) of the National Housing Act 
     (12 U.S.C. 1713(c)(3)(B), 1715e(b)(2)(B)(i), 
     1715k(d)(3)(B)(iii)(II), 1715l(d)(3)(ii)(II), 
     1715l(d)(4)(ii)(II), 1715v(c)(2)(B)), and 1715y(e)(3)(B)) are 
     each amended--
       (1) by striking ``110 percent'' and inserting ``170 
     percent''; and
       (2) by striking ``140 percent'' and inserting ``170 
     percent''.

     SEC. 3. CATCH-UP ADJUSTMENTS TO CERTAIN MAXIMUM MORTGAGE 
                   AMOUNT LIMITS.

       (a) Section 207 Limits.--Section 207(c)(3)(A) of the 
     National Housing Act (12 U.S.C. 1713(c)(3)(A)) is amended by 
     striking ``$11,250'' and inserting ``$17,460''.
       (b) Section 213 Limits.--Section 213(b)(2)(A) of the 
     National Housing Act (12 U.S.C. 1715e(b)(2)(A)) is amended--
       (1) by striking ``$38,025'' and inserting ``$41,207'';
       (2) by striking ``$42,120'' and inserting ``$47,511'';
       (3) by striking ``$50,310'' and inserting ``$57,300'';

[[Page S12462]]

       (4) by striking ``$62,010'' and inserting ``$73,343'';
       (5) by striking ``$70,200'' and inserting ``$81,708'';
       (6) by striking ``$49,140'' and inserting ``$49,710'';
       (7) by striking ``$60,255'' and inserting ``$60,446'';
       (8) by striking ``$75,465'' and inserting ``$78,197''; and
       (9) by striking ``$85,328'' and inserting ``$85,836''.
                                        NAHMA, National Affordable


                               Housing Management Association,

                                  Alexandria, VA, October 2, 2003.
     Hon. Jon S. Corzine.
     U.S. Senate, 502 Senate Hart Building, Washington, DC.
       Dear Senator Corzine: I am writing to convey the National 
     Affordable Housing Management Association's (NAHMA) strong 
     support for the FHA Multifamily Housing Loan Limit Adjustment 
     Act.
       NAHMA represents owners and individuals involved with the 
     management of affordable multifamily housing developments. 
     Affordable properties owned and managed by NAHMA members are 
     subject to the regulations of federal agencies including the 
     U.S. Department of Housing and Urban Development, the U.S. 
     Rural Housing Service, and the Internal Revenue Service. 
     NAHMA members provide quality affordable housing to more than 
     two million Americans with very low and moderate incomes. 
     Executives of property management companies, owners of 
     affordable rental housing, public agencies and vendors that 
     serve the affordable housing industry constitute NAHMA's 
     membership.
       The FHA multifamily insurance programs are an important 
     component of any affordable housing strategy. Your 
     legislation, which increases the maximum Federal Housing 
     Administration (FHA) multifamily mortgage loan limits in high 
     cost areas from 110 to 170 percent above the base loan 
     limits, will help increase the availability of affordable 
     housing for low-to-moderate income families. This bill will 
     encourage production of multifamily developments in some of 
     the most expensive areas in the nation--where affordable 
     housing is often desperately needed.
       NAHMA is pleased to offer its strong support for the FHA 
     Multifamily Housing Loan Limit Adjustment Act. I look forward 
     to working with you to advance this important legislation.
           Sincerely,
                                                   Kris Cook, CAE,
     Executive Director.
                                  ____

         National Association of Realtors, National Association of 
           Home Builders, Mortgage Bankers Association,
                                                  October 2, 2003.
     Hon. Jon S. Corzine,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Corzine: On behalf of the membership of our 
     associations who represent the home buying, home building, 
     and home financing industries, we are writing in support of 
     legislation you intend to introduce to increase the Federal 
     Housing Administration (FHA) multifamily loan limits in high-
     cost areas. Over the past 2 years, Congress and the 
     Administration have taken steps to update the FHA multifamily 
     loan limits. However, one final hurdle remains since the 
     current maximum FHA multifamily mortgage limits are 
     inadequate and continue to constrain new construction and 
     rehabilitation in many urban and suburban areas, where 
     construction costs are significantly higher than in the rest 
     of the country.
       The FHA's multifamily mortgage insurance programs enable 
     qualified borrowers to obtain long-term, fixed-rate, 
     nonrecourse, financing for a variety of multifamily 
     properties that are affordable to low- and moderate-income 
     families. This public/private partnership has resulted in a 
     successful program providing housing for a portion of the 
     population not usually served by private industry alone. In 
     addition to serving a valuable purpose, according to recent 
     calculations by HUD and OMB indicate that virtually all of 
     the FHA multifamily insurance programs operate on a break-
     even basis or raise revenue for the government.
       Without higher FHA multifamily loan limits in high-cost 
     markets, critical housing needs will go unmet. Those who will 
     be most affected will include low- and moderate-income 
     families, including important community service providers 
     such as teachers, firefighters, and police officers. By 
     increasing the maximum loan limit for FHA's multifamily 
     programs, these programs can help provide the housing 
     opportunities necessary for the economic and social well 
     being of our Nation. We applaud your efforts to increase the 
     availability of affordable housing in our Nation's high-cost 
     areas.
                                 ______